Osisko Mining Corporation

Osisko Mining Corporation

May 22, 2012 12:24 ET

Osisko's Canadian Malartic Mill Returns to Full Operation

MONTREAL, QUEBEC--(Marketwire - May 22, 2012) - Osisko Mining Corporation (the "Company" or "Osisko") (TSX:OSK)(FRANKFURT:EWX) is pleased to report that the Canadian Malartic mill returned to full operational status Saturday evening, May 19, 2012. This follows the earlier reported May 9th fire and completion of temporary repairs to the damaged number 4 cyclone set. Sunday throughput production totaled 41,000 tonnes, and Monday's throughput was 39,000 tonnes.

The mill resumed partial operation on the evening of Wednesday May 16th, with the grinding circuit utilizing three of the four cyclone sets and two of the three ball mills, as well as the semi-autogenous grinding (SAG) unit. Completion of temporary repairs to the fourth cyclone circuit and the completion of scheduled maintenance on the primary and secondary crushers allowed for the resumption of full production on the evening of Saturday May 19th.

Production rates are still at ramp-up levels but have now returned to the pre-fire range. During the past week modifications to the XL2000 cone crusher bowl and liners have been effected under recommendations and supervision from the supplier FLSmidth. Their representatives are currently on site monitoring and adjusting the crusher circuit while trials of the modifications are conducted. Current throughputs during this work are expected to range between 35,000 tpd and 40,000 tpd. Pending successful completion of this work, Osisko expects to see the circuit stabilize in the 40,000 tpd - 45,000 tpd range as the Company awaits the arrival and installation of the second FLSmidth XL2000 cone crusher. The second XL2000 (number 2 of 2 cone crushers comprising the secondary crusher) is currently expected to be installed and operational by July. This should allow the circuit to subsequently increase throughput to 50,000 tpd - 55,000 tpd. Further optimization to the circuit, including the installation in August of the previously announced second pebble crusher, is expected to lead to increased daily throughput by September.

Sean Roosen, President and Chief Executive Officer of Osisko, commenting on the return to operations noted: "We are very proud of the speedy effort our team has made in getting the mill up and returned to operation after the fire. We greatly appreciate the outstanding efforts of our employees, contractors and suppliers. We'd particularly like to thank Guay inc. for getting their large capacity crane to site so quickly which allowed us to remove the damaged equipment and commence repairs; Rematech Inc. for supplying site assistance and shop availability for the rubber pipe repair and cyclopack refurbishing; and FLSmidth Krebs for the very fast cyclone refurbishing in their shop. All of these suppliers gave us 24 hours per day assistance and really made a great difference in the speed of our recovery from the fire. The location of the Canadian Malartic Mine has allowed us to respond quickly to the challenges of the past ten days, and really gave us rapid access to the necessary expertise and support infrastructure."

Luc Lessard, Senior Vice President and Chief Operating Officer of Osisko, noted: "We are continuing to ramp up production, make modifications to improve throughput and stabilize the circuit. During the unplanned stoppage, we accelerated the regular maintenance of key operating units, which should improve our near term performance as we gain better plant availability."

Equipment and building damage from the fire is estimated between $6 and $8 million. The Company is working with its insurance underwriters and adjusters and expects the costs of the physical damages to be fully covered subject to a $250,000 deductible. Permanent repairs of the damage will continue over the next three to four months, with the eventual replacement of the number 4 cyclone set with a new cyclone cluster currently being manufactured by the supplier. Repairs to the damaged overhead crane and the mill roof will also be completed during this period. Minimal impact on production during these final repairs is anticipated.

About Osisko Mining Corporation

Osisko Mining Corporation operates the Canadian Malartic gold mine in Malartic, Quebec and is pursuing exploration on a number of properties, including the Hammond Reef Gold Project in Northern Ontario. At March 31, 2012, Osisko's cash balance totaled $144 million. The company has also recently negotiated an additional $100 million delayed drawdown credit facility and a one-year deferral of a $60 million payment with its leading lender CPPIB.

Forward-Looking Statements

Certain statements contained in this press release may be deemed "forward-looking statements". All statements in this release, other than statements of historical fact, that address events or developments that Osisko expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "scheduled" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur including, without limitation, the stabilization and optimization of the production, the optimization of the first cone crusher, the timely delivery and installation of the second cone crusher and the second pebble crusher and the expected increase of production deriving from the commissioning of such additional units. Although Osisko believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, including, without limitation, that all technical conditions will be met in order to proceed diligently with resumption of milling activities at Canadian Malartic however such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include adverse weather conditions, limited access to skilled consultants, mining development and construction personnel, Osisko's limited experience with production and development of operations, uninsured risks, regulatory framework and changes, availability of personnel, materials and equipment, actual performance of facilities, equipment and processes being lower than specifications and expectations, continued availability of capital and financing and general economic, market or business conditions. These factors are discussed in greater detail in Osisko's most recent Annual Information Form and in the most recent Management Discussion and Analysis filed on SEDAR, which also provide additional general assumptions in connection with these statements. Osisko cautions that the foregoing list of important factors is not exhaustive. Investors and others who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Osisko believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.

Contact Information

  • John Burzynski
    Vice-President Corporate Development
    (416) 363-8653

    Sylvie Prud'homme
    Director of Investor Relations
    (514) 735-7131
    Toll Free: 1-888-674-7563